The 2025 property market has got off to a rocketing start, largely driven by buyers looking to avoid the stamp duty increase in April, especially first time buyers for whom a few thousand pounds is a lot of money.
Where someone is selling a home, they’re usually buying another, so this activity is filtering up the market and we’re seeing strong activity at all price levels.
Interest rates
These have reduced slightly, and stabilised. It’s anticipated we’ll see 2 to 4 interest rate reductions this year, which is giving people confidence to move.
There are now 3.99% rate mortgages available, much better than a couple of years ago
Prices
Property prices rose 0.4% in February compared to January*, this is in line with anticipated price rises of 2-4% during 2025.
The market remains one of two halves. Approximately 50% of properties that go to market don’t sell, mostly due to unrealistic seller expectations. Though a significant number of these houses will come back on the market within 2 years. On the flip side, well priced, well marketed homes are selling.
Inheritance tax
The changes in the 2024 autumn budget sent a shudder through the spines of overseas investors and the farming community. Consequently the prime property market (typically above £2m in the home counties) has seen a slight slowdown at the start of 2025.
Conversely, I’m seeing more parents buying property for their children to a) avoid inheritance tax further down the line and b) help them on to the property ladder. Where parents can afford to do this, it’s a great idea all round that will avoid tax (don’t we all love that!) and financially benefit their children with immediate effect.
Housing shortage
It remains the case that we have a significant housing shortage in the UK, and supply/demand is reflected in pricing. Houses in particular are highly valued by buyers. Alongside this, the chronic shortage of rental properties coupled with higher rents is encouraging many renters to buy, fuelling the market.
What will happen next?
If I could answer that, I’d be retiring by the end of the year. However, while it’s predicted that property prices will rise this year, this is dependent on inflation and wage rises which will impact the cost of living, already a squeeze for some. Watch this space!
* Nationwide